Techcombank’s Prasenji Chakravarti lays bare their ESG strategy

The bank is transforming its IT infrastructure to better process green data.

There's a lot of money to be made in ESG — but there’s still a lot to be done before Vietnam, and especially its biggest banks such as Techcombank, can grow their operations in this nascent sector.

“To be honest, there’s a lot of capital waiting on the sidelines to be deployed for ESG,” Prasenjit Chakravarti, chief strategy and transformation officer at Techcombank, told attendees of the Asian Banking & Finance Forum in Vietnam. However, he also noted the need to resolve a few issues first.

“We need some of the structural policies to be in place, meaning, for example, a green finance taxonomy has to be in place for us to be able to actually implement that at scale,” Chajravarti said, noting that for Techcombank, “ESG is not distinct from our strategy — we are blending ESG into our strategy.”

Chakravarti is not sugarcoating it: Techcombank and Vietnam are just at the start of their ESG journey. “We’re working closely with the government on some initiatives to actually help them drive the right policies around refinancing, which I think will be helpful for moving the industry forward,” he said.

ALSO READ: Banks grapple through era of disruption by being the disruptor

Building Up
Whilst there is still a lot to be done to scale up ESG taxonomies and policies, Techcombank is doing its part to align its preparations for a greener future.
To start, the bank is taking a closer look at its people: its customers, its shareholders, and its employees. Techcombank employs over 11,000 people, with a very young population at an average age of 30.

“It’s a very young population, we have 11,000 of them, and they are really, very passionate about this (ESG). So how do we actually harness that energy and that momentum to really do well for the bank and also to generate good ideas for our clients?” Chakravarti mused, noting the need to include their employees in Techcombank’s ESG journey.

On the technical side, the bank is investing time and energy to transform its data IT architecture so that it can track and manage a whole set of ESG data. “Building that data set, in many ways, is crucial to how we actually enhance the way we build new products and services for the customer,” he noted.

As for the question if there is demand: “We do see a lot of demand from foreign investors and institutional investors in this space. And I think it is just a matter of time before we do more with that interest, as some of the enablers come into place,” he said.

ALSO READ: Empathy deficit erodes customers’ trust in banks

Is ESG a necessity?
There is demand from foreign investors — but what about from locals? Chakravarti wraps the conversation this way: it’s up to the bank to provide the option for retail customers.

“What we have found is that, in general, if you provide the customers with a product or retail banking product, which is aligned with their principles of sustainability ESG, those kinds of services are very welcomed by the customers,” he said, adding that they “are finding a lot of resonance on this topic with our customers.”

Chakravarti noted that the better question to ask is what can banks such as Techcombank do to provide the right solutions and products to the customer that tap into interest in ESG and make ESG products and services more “real” to the average retail customer.

Amongst ESG services that banks can offer include an additional feature in credit cards that helps the user track their carbon footprint.

ALSO READ: Greenwashing in banking: real concern or overblown issue?

For its part, Techcombank is working on developing green finance products for customers, such as auto loans for EVs and products that help their retail customers track their green footprint.

“What we want to really do is have a set of lending and deposit products, and investment products, which are linked to this, but they are still work in progress,” said Chakravarti, although he did admit that Techcombank has so far focused a lot more on the corporate banking side.